Irish loan sale could be key to control of Whitgift

Rival developers are eying an Irish debt sale that could see one of them secure a majority stake in Croydon’s Whitgift Centre.

Hammerson and Westfield have been in a standoff over the future of the mall since last year, but could be offered control if an Irish bank chooses to sell a loan secured against a 50% share.

Property Week reported on Wednesday that the Irish Bank Resolution Corporation was considering sale of the debt, which would give either developer a 75% share in the mall.

Both companies have proposed plans to transform it into a major retail hub within quick travel distance of the city centre. Hammerson bought a 25% stake in the centre last month, while Westfield has an agreement with the Whitgift Foundation, which also owns 25%.

The loan was taken out by the Howard Group and an IBRC subsidiary in 2005 to cover their £220m purchase of a 50% stake in the mall.

Because it was secured against the stake, any buyer would have the right to take possession against the mall if it is not paid or its conditions are breached.

Both Hammerson and Westfield are understood to be looking at options to secure the loan if it comes up for sale – although IBRC have not yet made a decision.

IBRC was formed in 2011 when the Irish government merged two failing banks – Anglo Irish and the Irish Nationwide Building Society – into one entity, as part of a plan imposed by the International Monetary Fund and the EU.

It was created in order to ‘wind down’ the banks’ assets in an orderly fashion – i.e. to transfer them to the state or to sell them off to recover as much taxpayer money as possible.

A spokesperson for Croydon council told EastLondonLines the future shape of Croydon’s town centre would depend on the outcome of the Whitgift race – including the eventual fate of Allders mall.

A statement from Westfield issued in September said it had expected Hammerson’s buy-out attempt and that it did not change its “commitment to regenerate Croydon”.

“As the development partner for the Whitgift Foundation, the charity with over 400 years’ history in Croydon and the freeholder and 25 per cent leaseholder of the Whitgift Centre, Westfield has delivered on its promise to bring forward its plans for the Whitgift Centre.”

But Hammerson, which is hinging its bid on is ownership of the nearby Centrale centre, allowing it to transform the area into a ‘Whitgift Quarter’, said it remained committed to pushing through its plans.